Tougher credit card rules on the way?

Tue Oct 27 2009 11:37:13

Credit card companies are being warned to "get their act together" as the Government begins a crackdown on irresponsible lending.

Ministers have launched a consultation on changes to current industry practices so consumers can get a better deal.

Credit and store card firms usually make consumers pay off the cheapest debt first, while more expensive debt - such as cash withdrawn on a credit card - is left until last.

The Government is considering rules which would mean the most expensive debt is paid off first, as well as raising minimum monthly repayments from their current low level to avoid customers taking decades to clear borrowings.

Consumer Minister Kevin Brennan said: "Card companies have to get their act together and do more for consumers. My opinion is clear, the current relationship between card companies and consumers cannot go unchallenged. We need to put the customer back in the driving seat."

Other moves being considered by ministers are a ban on increasing credit limits without prior consent - possibly by forcing consumers to opt-in - and restrictions on rate hikes on existing debts without proper explanation.

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